Three crypto predictions for 2025

After a year that saw the value of Bitcoin double on its way to six figures, it’s only natural to wonder what comes next. The renewed growth of the market, driven in part by the debut of crypto ETFs, came despite a slew of new regulations in the U.S. and abroad. At the same time, the incoming administration appears extremely bullish on cryptocurrency, which could further impact its popularity and the regulatory environment it exists in.

While it’s impossible to know precisely what lies ahead, three trends seem likely: a continued push towards data standardization due to new regulations, possible changes to the tax code, and the continued growth of stablecoins.

Let’s take a closer look at each.

1. Data standardization due to regulatory changes

In 2024, The Treasury Department and the IRS released final digital asset tax reporting regulations, implementing tax information reporting requirements for digital asset brokers and clarifying reporting for taxpayers, so as to make tax compliance and review easier. In 2025, these regulations will be in effect for the first time. The same is true for Markets in Crypto-Assets (MiCA) Regulation, a landmark EU framework for regulating crypto assets, while the OECD’s Crypto Tax Reporting Framework is being implemented by numerous member countries with a 2027 timeline.

While not the core rationale for these tax regulations, one indirect result is likely to be increased data standardization across the crypto ecosystem. Increased data standardization should benefit individuals and companies within the ecosystem because it will make tax and other regulatory compliance easier. Increased regulation is not just limited to the United States.  According to the Atlantic Council, 70% of countries are in the process of making substantial changes to their regulatory framework.

At the same time, there will likely be additional cryptocurrency litigation, which will continue to add nuance to the rules. Tax litigation has been in the news recently as cases are pending with respect to some substantive tax questions as well as the validity of regulations Treasury finaled right at the end of 2024 seeking to impose broker reporting on certain operators of websites connecting users to decentralized finance applications. In the securities-law arena, litigation around whether crypto assets constitute investment contracts subject to SEC jurisdiction is moving forward with a federal district court taking the extremely rare step of certifying an interlocutory appeal on the issue to the appellate court for legal clarification. As legal clarity develops through litigation, greater data specificity and standardization will increase as businesses aim to maintain legal compliance.

2. Changes to the tax code

During President-Elect Trump’s first term, he signed into law a variety of tax changes that represented the biggest overhaul to U.S. tax laws since the ‘80s. Those tax changes are set to expire at the end of 2025. While they were not crypto-related, their looming expiration will have financial implications that may spur other changes to the tax code. The question will be how crypto tax fits into this larger puzzle.

Tax questions remain for some aspects of crypto such as:

• How mining or staking income will be taxed.

• How lending of crypto assets is treated.

• Whether changes should be made to further align crypto with other financial instruments.

For example, crypto is currently exempt from the so-called wash-sale rule—which applies to stocks and securities. The incoming US president has indicated his support for the crypto industry, so it is not clear if or how his administration (and Congress) will seek to resolve any of these lingering questions. Ultimately, changes to the tax law will be weighed against how those changes impact government revenue. A change applying the wash-sale rule to crypto to align with stocks and securities would be seen as increasing tax revenue. This  could  allow for a change elsewhere that would offset that revenue increase.  There’s a lot to be discussed during 2025 with respect to the tax code, and crypto may play an important part.

Changes to the tax code aren’t limited to the U.S. either. Outside of the U.S., other countries are always re-thinking their approach to crypto taxation and related reporting regulations. For example, in November 2024, Hong Kong proposed exempting gains on cryptocurrency activities from taxes for certain groups, including hedge funds, private equity, and family investment vehicles to help position itself as a financial growth hub. Separately, Brazil issued a public consultation relating to its anticipated adoption of the OECD’s Crypto Asset Reporting Framework (CARF). Brazil has long been a leader in the crypto space with an existing set of tax rules and regulatory reporting requirements. This new consultation, seeking input from the public and key stakeholders, simply reinforces Brazil’s forward thinking approach to crypto.

3. Continued growth in stablecoins

Already, stablecoins are becoming a popular entry point into the world of crypto, as they offer exposure with less risk. In 2024, the market value of stablecoins crossed the $200 billion mark for the first time. In 2025, the market value is expected to double and trading volume is expected to triple.

The Treasury already carved out some exceptions for stablecoins by allowing digital asset brokers to do aggregate tax reporting for sales of those assets.  While the U.S. Treasury created a definition of stablecoin for tax reporting purposes,  a universal statutory definition of a stablecoin for all purposes has not been enacted yet in the U.S., A government-wide definition will be key to helping clarify where stablecoins sit in the broader financial ecosystem. Whether stablecoins are classified as crypto, currency, securities, or commodities will affect their regulatory requirements.

The bottom line

While 2024 was an important year for crypto, legislative and regulatory questions remain. In 2025, expect to see greater standardization, nuance, and adoption of cryptocurrency. The global crypto market is made up of a lot of moving parts. How they will come together and continue to evolve remains to be seen.

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